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What is the value for CGT notification purposes

Is the benficiary reuired to report the capital gain even if no CGT is payable?

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Residential property bequeathed to eight beneficiaries was subsequently sold and realised a capital gain of £80k. Disposal proceeds of £320k. 

Each beneficiaries share of the disposal proceeds is £40k and a gain of £10k. There will be no CGT to be paid.

Gov.UK guidance says:

You still need to report your gains in your tax return if both of the following apply:

  • the total amount you sold the assets for was more than 4 times your allowance
  • you’re registered for Self Assessment

Some of the beneficiaries are registered for self assessment. What is the value to determine whether the disposal should be reported, the total amount the property sold for or each beneficiaries share of the sale proceeds?

My interpretation of HMRC manuals is that it is each individuals share of the disposal proceeds that is the value to be taken to decide whether the disposal needs to be notified to HMRC. Am I correct?

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31st Jan 2019 00:17

Quicker to report it than ask the question surely?

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31st Jan 2019 08:12

TaxCalc says “no” ...

If you enter the details into the CGT section on TaxCalc, when you come to submit the return it notifies you that it won’t submit the CGT as it’s not reportable.

That said, I always input it even if it doesn’t subsequently get filed... if HMRC comes back on it, surely that’ll be a good excuse?

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31st Jan 2019 09:37

It's each individual's share of the proceeds that count. In your case that is less than 4 x the annual exemption.

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31st Jan 2019 12:44

Who was the vendor? If the property had not been vested in the beneficiaries prior to the sale, it is the PR's, not the beneficiaries who are liable. If the property had been transferred to eight people there would have had to be a trust deed.

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By SXGuy
31st Jan 2019 17:08

With my software, if you add a gain less than the threshold, it removes it. So I'm going with no.

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By CJaneH
31st Jan 2019 17:10

I agree with Montrose that it is likely that the estate is subject to Capital Gains on the disposal, unless as he/she says property had been transferred to the beneficiaries.

Was a professional valuation taken on the property? It seems a very large gain.

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